Standard and Poor’s credit rating agency has bumped Care New England’s bond rating down a notch after the hospital system announced plans last week to close Pawtucket’s Memorial Hospital.
S&P said the downgrade — from a “BB” to “BB-” with a negative outlook — reflects the uncertainty related to Care New England’s closure of Memorial, which requires state approvals, and its ability to achieve its financial targets for fiscal 2018, the agency said in a report released Monday.
S&P warns that failure to garner approval to close Memorial could jeopardize a proposed sale of Care New England to Massachusetts-based Partners HealthCare.
It’s the second downgrade from a debt rating firm in two months. Last August, Fitch Ratings downgraded Care New England’s bond rating two notches, to “BB” — below investment grade — following its third year of sizable operating losses.
Care New England previously reported that it expected to end the year with a $61-million loss.
A lower bond rating signals an increased risk to investors, which generally drives up the cost to the borrower.
